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European Central Bank: Further rate hikes unlikely following latest inflation data – Isabel Schnabel

Isabel Schnabelmember of the Executive Board of the European Central Bank (ECB), declared on Tuesday that “further rate hikes highly unlikely following latest inflation data“.

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The evolution of inflation is encouraging, the fall in underlying prices is notable.

We must be cautious when orienting policy for many months ahead.

The current level of restriction is sufficientconfidence has increased that the 2% target will be achieved by 2025.

It is “quite unlikely” that there will be further rate hikes following November’s inflation data.

But you should not declare victory prematurely.

Inflation is on the right track, but we must continue moving forward.

A prolonged recession is not in sight.

The data suggests the economy could be bottoming out.

Market reaction

EUR/USD has fallen sharply to three-week lows tested yesterday at 1.0804 following the comments. The pair is currently trading above 1.0812, losing 0.20% daily.

Source: Fx Street

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